WTI crude is trading at $91.73 this morning, down more than 5% from Friday's close, on news that the U.S. and Iran have "largely negotiated" a memorandum of understanding to reopen the Strait of Hormuz. The drop is real. So are the gains sitting in client portfolios for anyone who added Canadian energy exposure after March 4. And the question those clients -- and their advisors -- are asking this morning is not simply whether to hold or sell. The more important question is where those positions live and what the tax consequences of different decisions actually look like.
This is the account location conversation, and it does not wait for year-end.
The Tax Math on Current Energy Gains
A client who bought Suncor at $57 on March 10 and holds it in a non-registered account is sitting on a significant unrealized gain at today's prices. When and if they sell, the gain is a capital gain. The inclusion rate for individuals in 2026 is 50% on the first $250,000 of net annual capital gains -- the proposed increase to 66.7% was not passed into law and does not apply. The included gain is added to taxable income and taxed at the client's marginal rate.
At a 46.4% Ontario marginal rate (roughly $130,000 in income), a $40,000 capital gain produces $20,000 of included income, generating approximately $9,280 in federal and provincial tax. That is the real cost of selling an appreciated energy position today in a non-registered account. It is not a reason to avoid selling. It is a number the advisor and client need to have in front of them before the decision is made.
The chart below shows the after-tax return comparison for the same hypothetical $40,000 energy gain depending on where the position is held: non-registered, TFSA, or RRSP.
On a $40,000 energy capital gain, account location determines after-tax retention: a TFSA holder keeps the full gain; a non-registered account holder at a 46.4% Ontario marginal rate retains approximately $30,720 after tax. The RRSP defers the tax but the eventual withdrawal rate determines the final comparison. RRSP withdrawal at an assumed 33% retirement rate is shown for illustration.
The chart above shows why account location -- not the hold-or-sell decision -- is the primary planning variable for clients with energy exposure in mixed account structures.
The TFSA Is the Right Home for Future Energy Exposure
For a client who holds Canadian energy positions in a non-registered account and has TFSA contribution room, the account location question is immediate and specific. The 2026 TFSA contribution limit is $7,000. Total cumulative room for an eligible investor who turned 18 in 2009 or earlier is $102,000 as of January 1, 2026. Any growth, dividends, and capital gains inside the TFSA are entirely tax-free -- including on energy stocks benefiting from elevated oil prices.
The planning conversation is not simply "put your energy stocks in your TFSA." Contributing securities in-kind to a TFSA is a deemed disposition at fair market value on the date of transfer. If the energy position has appreciated, the in-kind contribution triggers a capital gain in the non-registered account. The client pays tax on the gain at the time of transfer, but all future appreciation is sheltered. Whether that trade-off makes sense depends on the size of the remaining gain, the client's expected marginal rate at disposition, and whether the position is expected to continue appreciating.
For clients who have already maxed their TFSA but hold RRSP room, the calculus is different. Energy dividends inside an RRSP compound tax-deferred, but the eventual withdrawal is taxed as income -- not as capital gains. A client expecting to withdraw at a higher marginal rate than they contributed at is potentially worse off with RRSP-held energy than with a non-registered account, where capital gains receive the 50% inclusion advantage.
The Superficial Loss Trap and the DRIP Problem
A client who decides to sell an energy position at a gain and has other positions showing unrealized losses may want to harvest those losses to offset the gain. The superficial loss rule under the Income Tax Act (ITA Section 54) allows the loss to be claimed only if the identical security is not repurchased within 30 calendar days before or after the sale, by the investor, their spouse, a corporation they control, or -- critically -- inside any registered account they hold.
The DRIP trap is the most common invisible violation: a client enrolled in a dividend reinvestment plan on a position they are selling at a loss will have the DRIP automatically repurchase units of the same security, potentially within the 30-day window, triggering the superficial loss rule and disallowing the deduction. The denied loss is added to the adjusted cost base of the repurchased shares -- it is not lost permanently, but it is deferred, which defeats the planning purpose.
For advisors reviewing client energy positions this week, the DRIP enrollment status of every position being considered for sale is worth checking before any trade is placed.